By Michael ShifterMichael Shifter is president of the Inter-American
Dialogue.

May 23, 2011

As political makeovers go, Peruvian presidential contender Ollanta Humala’s has been striking. The former army officer backed a military coup in 2005, and was the consummate outsider during his first bid for Peru’s highest office a year later. He ran proudly as a fiercely anti-system candidate and a self-proclaimed admirer of Venezuela’s populist, leftist president Hugo Chávez, losing a runoff by 5 percent to current president Alan Garcia. In 2011, however, Humala has tried to make the case that he is the epitome of prudence and moderation, portraying himself less as a Peruvian Chávez as the second coming of Brazil’s wildly popular former president Luiz Iniacio Lula da Silva. The question is: Will Peruvians buy the conversion?

The answer will come on June 5, when Humala, 48, faces Keiko Fujimori in a runoff election. Fujimori, a 35 year-old congresswoman, carries her own baggage: She is the daughter of Alberto Fujimori, Peru’s president during the 1990s, who is now serving a 25-year prison sentence for human rights violations and corruption. But with Fujimori doing her best to cast doubt on her rival’s claims and instill fear about him taking the reins in Peru, Humala’s true beliefs are under greater scrutiny than ever before.

The strategy appears to be working: the latest poll by DATUM shows that she has reversed the narrow lead once held by Humala and now enjoys a slight edge of just under 4 percent (with 13.8 percent still undecided or planning to leave their ballots blank). According to the survey, over 55 percent of Peruvians believe that, if elected, Humala would rule Peru as Chávez has in Venezuela by nationalizing private companies and scaring off new investors. Peruvians are notoriously wary (with good reason) of political promises after numerous corruption scandals that have stained politicians of all stripes, and are similarly skeptical of one of Fujimori’s principal pledges — that, if elected, she would not pardon her father. Less than 25 percent believe her.

Neither Fujimori nor Humala was the preferred candidate for most international investors. Both have taken pains to show their support for market-friendly policies. But given the choice, Fujimori is widely seen as less risky and more reassuring to the markets. The polling results and markets have tracked closely. Humala’s initial advantage led to a sharp drop in the markets and the Peruvian currency which have recovered with Fujimori now taking the lead.

There is no mystery why Humala wants Peruvians to associate him with Lula, who left office in January with an 80 percent approval rating. The former labor leader turned globalization champion was unique in his ability to straddle the ideological spectrum, a gift that endeared him to the working class, but didn’t alienate the elite business community. Lula also delivered concrete results for Brazilians, lifting some 30 million people out of poverty in his eight years in office and catapulting the country to its undisputed global status.

Humala’s ostensible change of heart may be sincere and not merely an electoral ploy, but there is surely a strong smell of opportunism in his abrupt metamorphosis. And the comparison with Lula is notably specious. After all, Lula’s political thinking evolved over decades: a product of his experience as a union leader, opponent of Brazil’s military dictatorship, and head of the Workers Party. His democratic credentials — the practiced art of give and take — were earned and shaped through a series of political battles. Indeed, Lula only reached the presidency on his fourth try.

But it’s also a stretch to say that Humala is hiding his inner Chávez. To be sure, Humala and Chávez share the background of being former army lieutenant colonels with questionable histories: Humala has been credibly denounced for human rights violations in the early 1990s and there isample evidence that the Venezuelan leader helped finance Humala’s 2006 campaign. But this time, though there are widespread suspicions and rumors, there is no such proof. And following Humala’s first-round win, after Chávez called him a "good Peruvian soldier," Humala publicly asked El Presidente not to meddle in Peruvian politics.

Even if Humala becomes Peru’s president and tries a "bait and switch," he would encounter enormous resistance in pursuing the path Chávez has taken in Venezuela. For starters, Venezuela’s oil wealth has bankrolled Chávez’s Bolivarian "revolution" — or at least allowed him to buy off his critics and support his poor, popular base. But there’s no comparable resource in Peru, which means the president would not have the economic wherewithal to implement radical new policies or could afford to antagonize the country’s financial interests.

Even more germane, Peru and Venezuela have had wildly different trajectories over the past few decades. When Chávez was first elected in 1998, Venezuela had endured 20 years of stagnant growth and there was significant popular hunger for sweeping change. Peru, on the other hand, has enjoyed the highest growth rate in Latin America over the past decade. Poverty levels have dropped sharply, and even the gap between the rich and the poor has been reduced.

So Humala has tapped into a desire for moderate change, pledging to bring down levels of corruption and crime and include Peruvians who have not enjoyed their fair share of the national bonanza. But as the campaign hits the final stretch, Humala — whose strength lies among the rural poor in the southern highlands — must now convince the decisive group of middle-class voters in Lima that there is therefore nothing to fear from his presidency.

Helping him out will be campaign advisors largely recruited from Lula’s Workers Party. Humala has barely concealed his emulation of Lula’s "Peace and Love" campaign of 2002, in which the hard-edged Lula took pains to present a kinder and gentler image of himself to the electorate. Humala’s pledge of stability to Peru’s business sectors that he has called a "commitment with the Peruvian people" bears a striking resemblance to Lula’s reassuring "letter to the Brazilian people." Humala’s team now also includes some economists who came from the campaign of former President Alejandro Toledo and whose views are well within the mainstream.

Humala has backed away from a commitment he made at the start of the campaign to a constitutional overhaul, as Chávez carried out in Venezuela soon after he came to office in 1999 (and as Bolivia’s Evo Morales and Ecuador’s Rafael Correa did subsequently). On the campaign trail, he has favored a measured "windfall profit" tax on mining companies, and opposes outright nationalizations (another contrast to Chávez’s policies). His once high-pitched nationalist rhetoric, often aimed aggressively at neighboring Chile, is now far more restrained. He is no longer against the U.S.-Peruvian free trade agreement, adopted in 2007, and now favors good relations with Washington. Humala has even gone so far as to distance himself from his own family: His father is known for promoting a virulently nationalist philosophy and his younger brother’s 2005 attempted coup against Toledo landed him a 25-year prison term. (Humala has said he won’t pardon him, but as with Fujimori and her father, many Peruvians have doubts.)

Yet despite all of these changes, there are signs that most of Lima’s middle and upper classes are reluctant to take a chance on Humala. They fear that he would derail the economic progress that has been made — either because of his wayward ideology or his incompetence. Most also have serious reservations about Fujimori, but with financial markets spooked and ready to react negatively to a possible Humala win, most will be risk-averse. So Fujimori may benefit from the "hidden vote" among the middle class. One well-known exception is Peru’s Nobel laureate Mario Vargas Llosa, who lost a presidential run to Alberto Fujimori in 1990 and has said he will vote for Humala, albeit "unhappily and with fear."

Fond memories of the elder Fujimori among a loyal consituency help explain his daughter’s appeal. She has linked herself to her father’s success in curbing hyperinflation and brutal insurgencies, along with carrying out popular social programs. She has promised continued economic growth and improved access to housing with enhanced sanitation. Fujimori has also campaigned as a law and order candidate who supports restoring the death penalty for certain serious crimes; she even hired former New York City Mayor Rudy Giuliani as an adviser on crime issues.

With less than two weeks before the final vote, the media wars have been unleashed in Peru, with both camps trading nasty charges and accusations. The climate is tense, ugly, and polarized, and is bound to become even more so as the two candidates contest for the nearly 45 percent of Peruvians who opted for one of the other three, more moderate candidates in the first round.

The rest of South America — particularly Brazil, Chile, and Colombia — is following the Peruvian election with keen interest, but also some measure of anxiety. Neither option in the runoff is attractive to the region, as both choices appear to be out of sync with the more heartening tendencies in the continent towards greater democratic governance combined with effective social policies.

By now, the battle among the different varieties of leftist politics in Latin America has been settled. The contrast between a buoyant Brazil and a badly deteriorated Venezuela is striking. The dramatic differences in performances reflect two kinds of governance, with the former prizing negotiation and compromise and the latter relying chiefly on arbitrary rule.

There has been a cumulative process, marked by trial and error and constant re-examination, in the Latin American countries where moderate, pragmatic politics with a leftist cast have taken hold: Brazil under Lula and Dilma Rousseff, Chile under Ricardo Lagos and Michele Bachelet, Uruguay under Tabaré Vásquez and now José Mujica, and El Salvador under Mauricio Funes. All have combined progressive, social reforms while hewing to mainstream economic policies, while others like Ecuador and Bolivia have seen more confrontational tacks, rewriting constitutions and taking sharp aim at traditional political and business elites.

Some Peruvians see an apparently more temperate Humala as an opportunity to fill a similar political space as their Brazilian and Chilean neighbors. If Humala pulls out a victory on June 5, then he’ll have a chance to prove that his transformation is genuine. Should he do so, that would be yet another major blow to Chavez and further evidence of his growing irrelevance in the region.